Eat-onomics With Melanie Cheng, Founder of FarmsReach

San Francisco-based FarmsReach pairs farmers up with buyers for sustainable local food systems, helping buyers source produce locally and support healthy farms. Founded in 2007, the online marketplace opened its public beta version in February 2009. It currently serves the San Francisco Bay Area and a few other regions, but aims to be nationwide by the end of this year.

Fast Company: What's your definition of sustainable food?

Melanie Cheng: We all have the idealistic wonderful definition where everything is ecologically sustainable. It's beyond organic: Everyone is paid a fair wage and people of all income levels are eating fresh, healthy local foods. That's the big dream for all of us, but the reality is that everyone—from farmers to distributors to buyers—is in different stages of getting there. So it's more a matter of journey and where you are along that path. There are so many variables for a sustainable food system. Everyone is good as long as you're on the road somewhere. So for some farmers who have been using chemicals for 50 years, it might just be using less, and it's okay, because at least they're down that path. Whereas a farm that has been farming organically for 45 years may want to go further and think about water, habitation, etc. They're all good as long as the intention is on the bigger dreamland goal.

FC: What do you think is the biggest challenge facing sustainable food right now?

MC: The regional food system is an essential component of sustainability, and I think the biggest problem today is just aligning supply and demand. The food system for the past 80 to 100 years has been a global food system, so lot of the infrastructure from when we used to feed ourselves from our own areas is gone, like the coordination as far as marketplace, tracking the growing number of smaller farmers and what each has available, and connecting them to buyers in their own area.

The big challenge in food systems is that because of the way it's been going for the last 50 years, it isn't following basic economic theory of supply and demand. It's a mishmash of farms guessing what to grow and guessing what the market wants. For regional farms, there is no way of knowing really what is the fair market value of things. They are just guessing what to charge, and this system inevitably ends up with a lot of inequities. Sometimes it's too high and unaffordable to customers, and sometimes it's too low and not viable to the producer.

FC: What does FarmsReach do to tackle that problem?

MC: Again, because of the global marketplace, there really hasn't been a real marketplace for regional foods. That's what we're addressing at FarmsReach: trying to regionalize the regional smaller growers so the buyers can identify who they are quickly, and know what they're growing.

No one tool is going to save the day for everybody, but what I'm excited about for FarmsReach is that we've been working on it from a technological standpoint since 2007, so we've personally witnessed the evolution of the industry. In 2007, the farm coop model was prevalent and growing—that was what we were working on first. Coops on farms sell to restaurants and smaller buyers, and just in 3 or 4 years, it's moved on to more of these community food systems, where it's been a vertical collaboration all along, from the producer to the end buyer. We've been working primarily in the San Francisco Bay Area, which is one of the more advanced regions—everyone here seems to be more aware of sustainable food. We're now also working with groups in Middle America where they're at a different stage, so we're able to help groups at different points in the progression.

Inevitably we'll be facing obstacles of how we aggregate on the demand and supply side, but we'll develop our software to meet the needs of where the industry is going to address those challenges.

FC: How do we move sustainable food into the mainstream?

MC: If you look at statistics, farmers markets and Community Supported Agriculture are awesome, growing distribution methods. But they still make up less than 1% of food volume sold in the country. If we really want to make an impact, we have to get more regional or seasonable sustainable food into larger supply chains. It's awesome if CSAs and farmers markets quadruple, but even so it's still only a tiny fraction of a bigger supply. That's why we're working with the wholesale channel, for distributors and bigger institutions. We have an intricate infrastructure of distributors for us to feel that trying to integrate existing foods into the infrastructure is a logically more economically viable way to get volumes of food into the system.

The answer will be ultimately a combo of the two. The USDA project we're working on now will be a collaboration of one of these alternative food crops with conventional optimizing who does what, because we don't want to reinvent the wheel and try to rebuild a whole distribution network when we have these hubs already there. It's just to get people working together, instead of being conventional versus sustainable. There is a way in the middle where everyone can work together in the community for healthy food for everybody.

FC: If you had to make one recommendation to consumers about sustainable food, what would it be?

MC: Just knowing where your food comes from. That alone builds awareness to help people start noticing, and also helps people to find out about the journey food takes to get to you. Or if they can identify and know what they're eating; that's also in Michael Pollan's "Food Rules": Know what it is. Know what you're eating and know where it came from. And that alone can solve a lot of our problems.